A flat tire is common cause variation. It’s normal wear and tear. Which is why all vehicles are equipped with a spare tire, jack etc.

Special Cause

Operator falls asleep

Machine malfunction

Computer crashes

Poor batch of raw material

Power surges

Broken part

Abnormal traffic (click-fraud) on web ads

Extremely long lab testing turnover time due to switching to new computer system

Operator absent

Someone slashing all four of your tires is special cause variation. It’s not anticipated and there is not much you can do about it.

Responding to Variation

Response to common cause variation is incremental and requires data (measurement)

Response to special cause tends to be knee-jerk and expensive.

So why do we care Craig?

We should care because more often than not the wrong type of variation is suspected and then the wrong response is applied (tampering), which is not only more expensive but it negatively impacts the staff working within the system.

For example, what was the reaction to the 9/11 attacks in the United States? They spent billions of dollars tampering with the system (a common cause response) that ultimately has not increased safety because it was not the source of the variation in the first place. The nature of special cause variation is that it never happens the same way twice (which is why the terrorists opted for shoe explosives instead of box cutters the next time around).

“Quality can not exceed the capability of the system. Quality can not be inspected into a product or service; it must be built into it.”

The Red Bead Experiment to show total fault in the system was made famous by W Edwards Deming (Deming attributes the original demonstration to Mr. William (Bill) A. Boller of the Hewlett-Packard Company).

The purpose of the red bead experiment, and the reason I cite it here, is to prove scientifically that the majority of problems in business are actually attributable to the system and not the employees. Furthermore the people charged with acting on and improving the system are the managers and leaders and not the employees. The red bead experiment is myriad in its lessons and takes awhile to unpack and folks much wiser than me have taken the time to try and unpack it for you…I defer to their brilliant efforts in explaining what Dr. Deming loved to present.

For more information from the source please read Out of the Crisis by W Edwards Deming. See page 347 for a written account of a 1983 demonstration in Pretoria, Oregon.

I think most people want and appreciate quality. Quality products (e.g.: a coffee maker) and quality services (e.g.: a blood test). However most businesses whether product or service based fail to understand that quality is part of a system. A system for producing widgets or a system for producing service. The quality of that system can only be as good as the system allows it to be. In other words if you do not build quality into the system there won’t be any.

“Quality can not exceed the capability of the system. Quality can not be inspected into a product or service; it must be built into it.” – W. Edwards Deming “Out of the Crisis” (Page 227)

You CANNOT achieve quality in a system by:

Slogans
Such as one on a mirror that says “The person you see in the mirror is responsible for your safety”. Which is completely wrong. The system is responsible for your safety.

Inspections
Inspecting a product or service after the fact to see how much quality is there (typically measured by defects) and while necessary in some cases will never actually increase the quality.

Performance Targets
This is one of the most ridiculous in that it does the exact opposite of what it is supposed to do. It ascribes to the employees what should be ascribed to variation within the system. In every group there will always be someone at the top and someone at the bottom which is normal.

All of the above items will only succeed in highlighting how bad the system is and then blame it on the employees who are not responsible for the system (management is) and furthermore destroying morale and pitting employees against each other

Dr. Deming’s 14 principles are:

Constancy of purpose
Create constancy of purpose for continual improvement of products and service to society, allocating resources to provide for long range needs rather than only short term profitability, with a plan to become competitive, to stay in business, and to provide jobs.

The new philosophy
Adopt the new philosophy. We are in a new economic age, created in Japan. We can no longer live with commonly accepted levels of delays, mistakes, defective materials and defective workmanship. Transformation of Western management style is necessary to halt the continued decline of business and industry.

Cease dependence on mass inspection
Eliminate the need for mass inspection as the way of life to achieve quality by building quality into the product in the first place. Require statistical evidence of built in quality in both manufacturing and purchasing functions.

End lowest tender contracts
End the practice of awarding business solely on the basis of price tag. Instead require meaningful measures of quality along with price. Reduce the number of suppliers for the same item by eliminating those that do not qualify with statistical and other evidence of quality. The aim is to minimize total cost, not merely initial cost, by minimizing variation. This may be achieved by moving toward a single supplier for any one item, on a long term relationship of loyalty and trust. Purchasing managers have a new job, and must learn it.

Improve every process
Improve constantly and forever every process for planning, production, and service. Search continually for problems in order to improve every activity in the company, to improve quality and productivity, and thus to constantly decrease costs. Institute innovation and constant improvement of product, service, and process. It is management’s job to work continually on the system (design, incoming materials, maintenance, improvement of machines, supervision, training, retraining).

Institute training on the job
Institute modern methods of training on the job for all, including management, to make better use of every employee. New skills are required to keep up with changes in materials, methods, product and service design, machinery, techniques, and service.

Institute leadership
Adopt and institute leadership aimed at helping people do a better job. The responsibility of managers and supervisors must be changed from sheer numbers to quality. Improvement of quality will automatically improve productivity. Management must ensure that immediate action is taken on reports of inherited defects, maintenance requirements, poor tools, fuzzy operational definitions, and all conditions detrimental to quality.

Drive out fear
Encourage effective two way communication and other means to drive out fear throughout the organization so that everybody may work effectively and more productively for the company.

Break down barriers
Break down barriers between departments and staff areas. People in different areas, such as Leasing, Maintenance, Administration, must work in teams to tackle problems that may be encountered with products or service.

Eliminate exhortations
Eliminate the use of slogans, posters and exhortations for the work force, demanding Zero Defects and new levels of productivity, without providing methods. Such exhortations only create adversarial relationships; the bulk of the causes of low quality and low productivity belong to the system, and thus lie beyond the power of the work force.

Eliminate arbitrary numerical targets
Eliminate work standards that prescribe quotas for the work force and numerical goals for people in management. Substitute aids and helpful leadership in order to achieve continual improvement of quality and productivity.

Permit pride of workmanship
Remove the barriers that rob hourly workers, and people in management, of their right to pride of workmanship. This implies, among other things, abolition of the annual merit rating (appraisal of performance) and of Management by Objective. Again, the responsibility of managers, supervisors, foremen must be changed from sheer numbers to quality.

Encourage education
Institute a vigorous program of education, and encourage self improvement for everyone. What an organization needs is not just good people; it needs people that are improving with education. Advances in competitive position will have their roots in knowledge.

Top management commitment and action
Clearly define top management’s permanent commitment to ever improving quality and productivity, and their obligation to implement all of these principles. Indeed, it is not enough that top management commit themselves for life to quality and productivity. They must know what it is that they are committed to-that is, what they must do. Create a structure in top management that will push every day on the preceding 13 Points, and take action in order to accomplish the transformation. Support is not enough: action is required!

Dr. Deming – You Tube Documentary

This following three part video was originally broadcast in 1992 as part of the BBC’s “Business Matters” series. The episode is called “A Prophet Unheard”.